The Cost of Poor Resource Management to Your Services Business

Do you have a resource management plan? Do you track your resources thoroughly? Some managers do, others don’t.

In production, construction, manufacturing, and other similar industries, resource management is always a high priority. In service-based businesses — not so much.

I know, tracking yet another thing is time-consuming. Wouldn’t your time be better spent on something else?

There’s no clear answer to the question above — it all depends on your management style. For instance, a small team of three or four people may find it useless to track resources.

However, you’d be surprised to learn that even the smallest teams (I’m looking at you, solopreneurs!) could benefit from resource tracking. Or, better said, they could avoid the losses most services companies incur when they don’t track resources.

We’ll get to that in a bit. Until then, let’s settle something real quick.

What Are the Resources Services Companies Typically Use?

I’ve mentioned industries like construction and manufacturing above. The resources they use are pretty obvious (at least some of them): various materials, consumables, and other similar things.

But there are other resource categories, as well, that manufacturing companies share with their services counterparts. The two most common are:

1. Human resources. Yes, that’s your employees. I, too, loathe referring to human beings as resources, but, alas, the English language has some updates to make.
2. Digital systems and solutions. Your CRM, ERP, financial software, eCommerce platform, email marketing solution, social media planner, even your email all fall into this category.

Does this mean that you should track every little cent your systems bring in and have your team account for every minute they spend in front of the computer? God, NO! Please don’t ever do that to your team!

Instead, take the ROI-oriented approach:

• Could you empower your team with better solutions to enhance their productivity?
• Is your tech stack obsolete and in need of a refresh?
• Are you using all the technology available to your business (without overdoing it, of course)?
• Do you assign the right task to the right team member based on their skill set? (Hint: only half of the workers worldwide hold a job that matches their education and their skill set).

If the answers to these questions aren’t usually on your list of priorities, let’s see what you stand to lose.

3 Ways in Which Poor Resource Management Harms Your Bottom Line

There is one common mistake most leaders are guilty of, especially in companies that sell services:

1. You Underuse Your Resources and End Up Paying More than You Should or Making Less than You Should

This can happen in SO many ways. Some of them are:

• You pay for software that you don’t really use. Check your monthly subscriptions — are you still using everything you pay for? You may hold on to some of those subscriptions thinking that you’ll get around to using that solution again. But why not halt payments in the meantime? If you really need that platform, you can resume them any time.
• You rarely use the software you pay for at full speed. Most SaaS solutions are powerhouses of features. Just think about Salesforce, NetSuite, and Mailchimp. You can manage an entire business just with these three. However, if they don’t “speak” to each other, you’re not using them at full capacity. Instead, you create data silos that bring about missed sales and marketing opportunities and a lot of time lost on manual data entry.

• You assign random tasks to random team members because you are short-staffed. Are your software developers writing technical documentation or content? Is your Marketing Manager spending hours every week migrating data from Salesforce to Mailchimp or similar? I get it — by not hiring more people, it feels like you save money. But you’re actually losing money! When you assign tasks that are below an employee’s “pay grade”, you’re essentially paying them more for something that you could easily outsource if you don’t want to commit to a new hire. Or for something you could solve with the right software.

2. Your Information Is Scattered Across Platforms and Putting it Together Takes Valuable Time Away from Your Team

Is your company still fostering data silos? Not sure? Let’s look at a quick quiz:

• Do your salespeople have to chase marketers for lead statuses?
• Do your marketers need to chase sales reps to learn about sales insights?
• Are project statuses given verbally instead of being tracked in a unified platform?
• Do you still use spreadsheets for databases?
• Is project progress still discussed via email instead of readily available on a platform that everyone has access to?

If you answered yes to one or more of the questions above, it means that your team is probably working dozens of hours more per week handling menial tasks and chasing down information from other departments or from their own colleagues.

Accurate, widely available data is the cornerstone of collaboration and productivity. When you have the right systems in place and when those systems are integrated, your team can save dozens of hours that can be put to better use.

Let’s look at some examples:

• If you integrate Salesforce with Mailchimp or with Constant Contact, your marketing and sales departments can work together, not against each other. When a sales rep updates the status of a lead in Salesforce, this information is available in real-time to the marketing department. They can see it directly in Mailchimp or Constant Contact, where it is automatically added to another list and gets sent the right campaigns to continue their nurturing. All automatically, without anyone losing any time or losing sight of any lead.
• Are your support representatives getting cases via email? Why not automate this process and offer stellar customer support and near-instant replies to customer queries. You can do that and so much more with the Zendesk for NetSuite integration.

3. You Misuse Resources Because You Don’t Know Exactly How Your Project or Business Is Performing

Data-driven reporting is not just nice-to-have these days. And it’s not something only C-level executives should have access to.

Everyone should be able to see how a certain project or the business, in general, is progressing. But that rarely happens because of the same data silos mentioned above.

If your sales information is available only to sales reps and the CEO, very little progress will be made. Every department is responsible for sales, from accounting to marketing and project management. They all need to be in the loop.

Otherwise, they won’t know how to allocate resources and they’ll end up shooting blindly.

For example, the marketing department may choose to invest in promoting a service that there is very little demand for. Your sales reps know this because they talk to potential customers directly and so do project managers. But your marketers don’t have access to those reports. They just see a slump in the sales of a certain service and figure they haven’t thrown enough money at it.

So they throw more. This is resource misallocation 101.

You don’t just lose the money you spend on useless campaigns. You also lose the money you paid your marketers for their time and you miss the opportunity to put together campaigns that would have actually sold something.

Wrapping Things Up

Poor resource management is like a forest fire. It starts small and looks totally containable. But if you don’t contain it the second you see it, it will be too late.

Your departments may have separate offices and Slack channels, but they work for the same goals (or they should). If, however, you blindfold them with data silos and information that’s just out of reach, resource misallocation will spread like a wildfire.

Start by breaking down the data silos. Integrate your mission-critical solutions today and empower your team to do their best work and say goodbye to menial tasks.

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